It’s likely that you’ve heard of Dogecoin by now, if only from news headlines. This form of cryptocurrency has been making waves in the investment community of late in large part due to its funny name and viral meme origins, but it’s also possibly becoming a more legitimate investment option. So what exactly is Dogecoin? The answer is as complex as it is amusing. Let’s break things down and take a look at Dogecoin’s origins, where it came from and how it became the king of all “meme stocks.”
What Is Dogecoin, and What’s Up With the Dog ?
Dogecoin is a cryptocurrency, like Bitcoin or Ethereum, but that’s largely where the similarities end. It was intended to be nothing more than a joke and was originally created in 2013 by two software engineers named Billy Marcus and Jackson Palmer (pictured here).
The pair designed their new crypto coin with the intention of creating a satirical response to Bitcoin, and they selected a Shiba Inu dog from a popular internet meme to be the face of Dogecoin. “Doge” is a deliberate misspelling of “dog,” which was in line with the humor used in the original memes that included a photo of a Shiba Inu side-eyeing the photographer.
Marcus and Palmer set up their new joke currency with its own website at Dogecoin.com, proclaiming the faux digital asset “an open-source peer-to-peer digital currency, favored by Shiba Inus worldwide.” Soon after its launch in December 2013, Dogecoin exploded in popularity after inspiring its own subculture on Reddit.
Early on, Dogecoin gained popularity as a method of “tipping” others online similarly to giving a thumbs up on Facebook or liking a social media post. To the founders’ astonishment, however, Dogecoin began to grow not only in popularity but also in value. Many fans were attracted to its irreverent take on cryptocurrency and the fact that there’s no limit to the number of coins that can be “produced.”
The digital currency further continued to rise in popularity when its fan community began using Dogecoin to contribute to charity campaigns such as Doge4Kids and Doge4Water. As the Dogecoin community’s altruistic efforts increased, the coin’s popularity continued to surge.
Ultimately, Dogecoin fever even began making fans of celebrities such as Kevin Jonas, Guy Fieri, Snoop Dogg and Elon Musk. The wave of celebrity endorsement helped send Dogecoin out of the realm of a lighthearted internet joke and into the role of serious cryptocurrency contender — albeit a hilarious one.
What Are Meme Stocks, and Where Did They Come From?
Dogecoin isn’t alone in its classification as what’s become known as a “meme stock.” Meme stocks are a relatively new phenomenon that’s appeared much to the dismay of traditional Wall Street investors. What sets a meme stock apart from other stocks is that the rise and fall of its price tend to have little, if anything, to do with the value of the company behind it. Instead, its buying and selling volumes are inspired solely by the hype it’s generated on social media platforms like Twitter and on websites like Reddit.
This phenomenon was what led to the Gamestock and AMC stock sagas of early 2021. In essence, large groups of investors got together on social media and decided to drive up the prices of these stocks by all buying shares of them at the same time. The incidents created major waves on Wall Street as professional investors realized just how powerful the coordinated efforts of retail (meaning non-professional) investors could be. For the first time in history, stocks became a lot less predictable — even companies with questionable performance indicators, such as Blockbuster, BlackBerry and Nokia, saw double- and triple-digit price percentage increases.
Should You Invest in DogeCoin?
The better question is, should you take an investment in Dogecoin seriously? The important thing to realize is that Dogecoin is not the next Bitcoin begging to happen. The reason that Bitcoin has been increasing in value as drastically as it has is a matter of supply and demand.
Because there’s ultimately a lifetime cap on the number of Bitcoins that can ever be created, people are willing to pay more to get a piece of the action. Dogecoin, on the other hand, has no limit as far as the number of Doges that can exist, and millions of new Dogecoins are released onto the market each day.
Throughout the course of the coin’s existence, the price of a single Doge hasn’t yet risen to 50 cents. That said, this can also be a fun excuse to invest if you find yourself so inclined. Among the reasons that Dogecoin has become so popular is that it’s easy to invest in for a very low amount of money, which presents minimal risk. The added perk is that the price also doesn’t have to rise a great deal for investors to realize gains.
Say, for instance, you bought 20 Dogecoins in March of 2021 when they sold for around 5 cents apiece. At the time, this would’ve required the investment of a mere dollar. When the price of Doge briefly rose to 40 cents a share in April of 2021, your 20 Doges suddenly would’ve collectively been worth $8 — not a bad return on a $1 investment.
Just be aware that the price of Dogecoin tends to be incredibly volatile and unpredictable. Choose the amount you want to invest wisely, and keep in mind that Dogecoins can fall in value just as quickly and randomly as they occasionally surge.
How and Where to Go About Investing in DogeCoin
Wondering where to buy Dogecoin? Current events have made it much easier, as many more trading platforms are now offering Doge purchases due to public demand. In order to get in on the craze, simply select one of these trading platforms and create an account. Many trading platforms are available as apps you can download and use to trade — you might already be using Robinhood, for example.
Upon signing up, you’ll be required to provide basic information such as your name and address. You’ll also be required to prove your identity, but often this is as simple as uploading photos of your driver’s license. From there, you’ll set up a connection with your bank on the platform and use it to fund your new account. After that, all that’s left to do is navigate over to the cryptocurrency section, select Dogecoin and start trading.
Some of the more popular apps and trading platforms that currently allow members to buy Dogecoin include: